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| Image: Boeing |
Speaking at Routes Europe, CEO Geir Karlsen sees that size of fleet as the sweet spot for Norwegian's network aspirations.
Newly restructured LCC Norwegian is planning to rapidly grow from 70 to 100 aircraft over the coming two years, but CEO Geir Karlsen is confident that old mistakes will not be repeated.
Speaking at Routes Europe 2022 in Bergen, Karlsen said Norwegian experienced “a perfect storm” in the run up to the pandemic. The company had been through supplier issues with its Boeing 787s and 737 MAXs and was already restructuring when COVID-19 hit.
Karlsen had been hoping to post a profit in 2020, but this never materialized. Instead, Norwegian went through a court-led restructuring process in Ireland and Norway, which Karlsen described as a “reset.”
During that process, Norwegian agreed to keep 50 leased 737s and this is set to grow to 70 this summer. “It’s a 40% increase, and that’s what I call growth,” Karlsen said.
A further 15 737 MAXs are slated to follow in spring 2023. Norwegian’s network expansion will be evenly spread across its bases in Denmark, Finland, Norway, Spain and Sweden.
“We have an organization at Norwegian where we can probably run close to 100 aircraft, with the same staff,” Karlsen said. “That’s why I think the sweet spot today is 90- to 100-aircraft and we would like to get up there as soon as possible.”
Karlsen is planning to reach this scale within two years. When asked whether this expansion might be too rapid, he replied, “Back in 2017, 2018 and 2019, we had a lot of aircraft coming our way, meaning too many deliveries, both on narrowbodies and on widebodies as well. The growth was too aggressive, way too aggressive. This time, we have the luxury of actually growing into demand.”
When Norwegian gets above 80- to 90-aircraft, Karlsen said the airline will face a “big decision” about expanding outside of the Nordics.
“We did do that back in the day. We had a pretty nice operation out of Gatwick, we were flying massively within Spain, and we flew from Germany to Spain and so on,” Karlsen said. “I’m not saying that’s what we’re going to do, but I think that at 80-, 90-, 100- aircraft, we will have to consider doing that.”
Despite this aggressive growth strategy, Karlsen said long-haul flights are “not on the agenda” for Norwegian.
Source: Routes online